Financial Daily from THE HINDU group of publications
Friday, Jun 10, 2005
Financial Daily from THE HINDU group of publications Friday, Jun 10, 2005 |
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Industry & Economy
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Economy `IT, auto sectors in TN ooze confidence' Our Bureau
Chennai , June 9 THE information technology industry and the automotive and auto components industry in Tamil Nadu, among the top contributors to the State's economy, are optimistic in their outlook though they have some concerns, according to a survey by CII. These are among the five sectors - the others being textiles, chemical and fertilisers, and cement - that were studied as a part of a business outlook survey in the South. The sectors were selected based on their contribution to the State's GDP. In Tamil Nadu, the automobile and components sector reported a 20 per cent growth in profit in 2004-05. But it was high input costs that affected their performance. In 2005-06 exports are expected to grow at 20-25 per cent. Their concern is the lack of good quality steel scrap and delay at ports. The IT industry posted 25 per cent increase in profit in 2004-05 and headcount rose by 25 per cent. In the current year, the headcount is expected to increase by 60 per cent and overseas billing by nearly 40 per cent. The industry is concerned about the lack of office space and slow communications networks. The textile industry grew by 10 per cent with production growing by 10 per cent and capacity utilisation by 15 per cent. The sector hopes to see 15 per cent growth in sales in 2005-06. The growth in demand calls for expansion but raising funds is a challenge, according to the survey. The chemicals and fertiliser industry's profits too grew by 10 per cent in 2004-05 but it had to cut back on production to control prices. This trend could hold in 2005-06 and cheap imports are worrying the players. The cement industry grew marginally, while exports fell by four per cent up to December 2004. Post-tsunami reconstruction activity could spur some growth, according to the survey.
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